California

Tenet Considers Moving Out of Santa Barbara

The CEO of six months says the company needs to shed its 'tradition of self-indulgence.'

Trying to distance itself from a "tradition of self-indulgence," Tenet Healthcare Corp. may move its headquarters out of Santa Barbara, the pricey home of Jeff Barbakow, the hospital chain's former chief executive.

A decision will be made within three months, Chief Executive Trevor Fetter said in a memo to the approximately 115 Tenet employees who work in Santa Barbara. A move would be at least a year away. Fetter became CEO in September, replacing Barbakow, who resigned in May.

"I think it's clear to everyone that the Santa Barbara headquarters location was originally created for the personal convenience of the top executives of this company," Fetter said in the memo, which was first reported in the South Coast Beacon.

"I joined Tenet in 1995 in part because I found the idea of living and working in Santa Barbara very appealing. Unfortunately, this company and its predecessors had a tradition of self-indulgence at the top. One of my priorities has been to do away with that tradition."

For The Record Los Angeles Times Saturday March 27, 2004 Home Edition Main News Part A Page 2 National Desk 1 inches; 33 words Type of Material: Correction Tenet Healthcare -- An article in Thursday's Business section about Tenet Healthcare Corp.'s settlement of two federal inquiries misspelled the last name of Tenet's general counsel. His name is Peter Urbanowicz, not Urbanowitz.

Fetter is attempting to limit the damage from of a series of scandals that have rocked Tenet over the last 18 months, including lawsuits alleging doctors performed hundreds of unnecessary heart surgeries at its Redding hospital and government probes into a number of business practices throughout the chain.

Some shareholders have complained about the expense of Tenet's corporate home. For years, a fleet of Gulfstream jets ferried executives from the seaside city to Dallas, home of Tenet's operational headquarters, where it employs 750. A Tenet spokesman said two of the jets had been sold and the sale of the last was pending.

"They sold the jets? That's not a good sign," said Steve Cushman, executive director of the Santa Barbara Region Chamber of Commerce, who hoped to persuade the town's biggest corporate citizen to stay.

"They're high-paying jobs. They are very generous in the local community, and so are their employees and their executives. That hurts," he said.

But Cushman bristled at the idea that locating in Santa Barbara reflected corporate self-indulgence: "I understand what Trevor is trying to do is to make the stockholders happy. I don't blame him. Santa Barbara is an expensive place to live. We can't change that. We don't particularly want to change that."

But relocating to Santa Barbara 10 years ago made sense for Tenet, he said. It was on a tennis court that Cushman lobbed the idea of relocating to Barbakow, who had just been named CEO of Tenet. The company was then located in the former National Medical Enterprises building in Santa Monica.

Barbakow "was commuting down to Santa Monica every day," Cushman said. "I played tennis with him, and I said, 'Hey, why don't you move your company to Santa Barbara?' "